How and When Can You Claim Refund Under GST? Who Can Do So?

The Goods and Services Tax regime has simplified the life of business owners by making the process of GST filing and returns easier and within their reach. As per the new taxation laws, every business has to file monthly and annual returns.

Sometimes, an enterprise owner ends up paying more tax, and he or she must file a tax refund within a specified time frame. For example, Mr A had to pay an amount of Rs. 10,000 as GST but by mistake, he paid Rs. 20,000 while filing the online tax.

The excess tax paid is Rs 10,000 and can be filed for return using the form RFD-01. The time limit has been set up as two years for claiming the return from the authorities.

When To File A Refund?

  • Involvement in the export of good and services
  • Supplying essentials to special economic zones and developers
  • Deemed exports
  • Purchase made by an agency of the United Nations and organisations notified under the consulate of the United Nations
  • Judgement by the Appellate authority or decree for the refund of taxes
  • Excess tax payment made by mistake
  • Electronic cash balance ledger shows extra cash
  • Accumulated input tax credit due to payment of excess tax on input supplies
  • Pre-deposit refund: Refund of GST to international tourists during departure on goods carried abroad
  • CGST and SGST refund for the trade within interstate

How To File GST Return

Before you understand how to file gst return, remember that you need to follow a procedure as laid down by the GST council. The amount of refund must be higher than Rs 1000 for it to be processed.

  • After verifying your GST number online, you will have to fill the GST return form RFD-1 if you meet the eligibility criteria – it should lie in the ambit of the scenarios stated above.
  • The return should be filed within two years of the relevant date of the refund application. Pertinent dates are discussed for different situations and must be confirmed from the official GST website.
  • Upon submitting the RFD-1 form, an auto-generated acknowledgement form GST-RFD-02 will be sent to you and will be the reference form for future claims.

If the tax authorities find any discrepancies in the process, the GST-RFD-03 form will be generated and sent to the taxpayer to make corrections in the application.

Manual Filing Of GST Returns

Just like RFD-01 is made available for the taxpayers to file the e-return without any hassle, RFD-01 A is used to file the return manually. The form can also be used in the case when the taxpayer is unable to submit the claim online.

Claiming Refund Under GST

Filing a claim involves submitting a self-declaration from the taxpayer that the amount will not be transferred by any means or utilised for any entity or third person. If the refund amount is more than Rs. 5 lakhs, the taxpayer has to submit further supporting documents as required by the tax authorities.

How Long Will The Refund Process Take?

Generally, the GST refund amount is settled within a month of filing the return, but the duration depends upon the claim amount deposited by the taxpayer. The claim form goes through various checks for audits and might get scrutinised for any discrepancy. The taxpayer will receive the refund if the claim filed is error-free and is authenticated by the authorities.

If the verifying personnel found the taxpayer’s claim to be unjust, the claim amount will be transferred to the customer welfare fund department.

Provisional Refund

For the GST refund arising from the export of goods and services, the authorising officer has the right to issue a provisional refund of 90% through GST-RFD-04 form. You can acquire the provisional refund in the following cases:

  • The GST compliance rating of the tax claimant is more than 5 out of 10.
  • There is a clean record of the taxpayer and has never been found evading taxes in the last five years.

Closing Thoughts

The electronic filing of refunds has removed the cumbersome process of the manual filing process and has facilitated the business owners to manage their tax accounts at the comfort of their home. You can verify gst number online to access the system to claim the excess taxes paid to the government and check GST refunds online.

About the author

Paul Teresa

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